Beware the No-fault Deductible

As more and more people buy their auto insurance online, they are losing out on the benefits that are gained from purchasing insurance with the assistance of a knowledgeable insurance agent. Companies offering Massachusetts auto insurance online often try to do everything possible to offer the lowest rates, and sometimes they do this by selling policies that don’t provide adequate coverage.

A good example is when companies save you a few pennies by selling no-fault Personal Injury Protection (PIP) coverage with a deductible. PIP coverage is compulsory in Massachusetts, and it covers medical bills and lost wages up to $8000 when you’ve been injured in an auto accident. Except in very rare circumstances, you are required to use PIP coverage for your initial medical bills after a car accident. Your health insurance will not cover those bills, even if you have a PIP deductible.

In fact, if you have a PIP deductible, you will be stuck with the bills even if you are not at fault for the auto accident. Because of the way the motor vehicle laws are written, the at-fault person’s liability insurance isn’t responsible for bills that are covered by PIP, or bills that would have been covered by PIP but were not because of a deductible.

That’s right – if you have a PIP deductible, you will be stuck with the bills and the at-fault person and their insurer will have no responsibility! (To be clear, you can still bring a claim against them for other damages, but they are not required to include any bills that should have been covered by your PIP coverage.)

The lesson here is clear – don’t purchase PIP coverage with a deductible. Saving pennies on your auto insurance bill could cost you thousands of dollars, even if you aren’t at fault. This is one reason why it makes sense to purchase your insurance through a qualified agent, not by yourself online.